Nexus One Adds Multi-Touch, Closes iPhone Gap

Here's the challenge for Apple: If I'm an iPhone prospect but I don't want to switch to AT&T and the Nexus One (forget Droid) is available, I'm going to buy it and be generally happy. Yesterday Google announced the addition of multi-touch (pinch, zoom) functionality to the device via a software update:

Starting today, Nexus One users will begin to receive an over-the-air software update on their phones. This update provides some great new features, and fixes a few problems that some users might have experienced, including:

Google Goggles: this mobile application will now be available directly on your device by launching it from your All Apps menu. Just use your Nexus One camera to start searching the web

Google Maps: the Maps application with be updated to a new version, Google Maps 3.4, which will include:
Starred items synchronized with maps.google.com - access your favorite places from your phone or computer
Search suggestions from your personal maps.google.com history - makes it easy to search for places you've searched for before
Night mode in Google Maps Navigation - automatically changes your screen at night for easier viewing and driving

Pinch-to-zoom functionality: devices will now include a new pinch-to-zoom mechanism in the phone's Browser, Gallery and Maps applications

3G connectivity: we will provide a general fix to help improve 3G connectivity on some Nexus One phones

Apple owns patents on multi-touch, but Palm's WebOS and soon Windows Mobile will be using it in addition to Android 2.1. The question is whether Apple will go after them. So far the answer is "no." Yet the addition of "pinch-to-zoom functionality" eliminates a major user-experience advantage that the iPhone had over Android.

In the end, the iPhone is still a holistically better device than the Nexus One, though the Google phone has individual features that are stronger at this point (we'll see what the next iPhone brings). Having used the Nexus One now for about three weeks, here's what I really like:

The Nexus One overall has closed the gap between Android and the iPhone, though not completely. A particular pet peeve of mine, for example, is the native Android keyboard. And the Android camera, though a 5 megapixel, doesn't take pictures as good as I was expecting.

The iPhone, overall, is a more intutive and more "elegant" device. The apps for the iPhone are generally "nicer" and the app experience is still generally better than the "mobile Web" experience favored by Android. App developers have told me they like Android because they don't have to wait for approvals and so can "iterate" faster. But the general user experience on Android apps is inferior to their iPhone counterparts.

One interesting question, given the rising competition between Apple and Google, is whether Google will keep more and more innovations for Android or roll them out for the iPhone much later. Google Navigation is a great example of this. While the company said that the iPhone can support it and that it would eventually come to the iPhone it has now been several months and there's no sign of it for the iPhone. 

Google is caught in an ambivalent position: wanting to provide Android with unique features and advantages while still wanting to reach the still much larger iPhone/iPod Touch audience. 

Verizon's massive ad spending on behalf of Droid appears to have affected iPhone sales somewhat. Droid is a weaker device (even with the coming software update) than the Nexus One. The Nexus One, for me, has diminished the "must have" impulse around the iPhone. And if Apple continues with AT&T in the US much longer it will loose an opportunity that it has now to become the dominant smartphone.